Challenges and potential outcomes of implementing fractional shares in India

While the concept of fractional shares presents several benefits, there are challenges to its implementation in India. One challenge is that fractional shares may not provide voting rights in the company, limiting the ability to voice opinions on company matters. Additionally, frequent trading of fractional shares could lead to increased brokerage-related fees. In terms of implementation, Indian rules presently prevent brokers from acting as dealers, making it necessary for changes to be made to existing regulations. Either brokers would need to be allowed to facilitate fractional trading or the Companies Act would need to be amended to permit companies to issue fractional shares. The future actions of SEBI and the government remain uncertain at this stage.